Investor Presentation 1 December, 2019
PEMEX’s Main Issues 1 2 3 4 5 Crude Oil High Debt Crude Oil Fiscal Burden Production Fuel Theft Maturity Processing Decline Profile The strategy developed by the new administration is focused on addressing this issues 2
PEMEX’s Main Issues 1 Fiscal Burden 3
Relief to the Company’s Fiscal Burden Variation vs previous Fiscal Year Rate year 2019 65.00% Current Rate • Gradual scheme that allows federal public finances a 2020 58.00% 7.00% transition process to adjust 2021 54.00% 4.00% the federal revenues and does not impact the budget equilibrium of the Federal Government This reduction will yield estimated savings around MXN 47 billion in 2020 and MXN 83 billion in 2021 4
PEMEX’s Main Issues 2 Crude Oil Fiscal Burden Production Decline 5
PEMEX has Managed to Stabilize and Increase Crude Oil Production Daily Crude Oil Production 1 2,000 Thousand barrels per day (Mbd) 1,950 1,900 1,850 1,800 1,750 1,700 1,650 1,600 1,550 1,500 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Abr May Jun Jul Jan Ago Sep 2018 2019 Jan Feb Mar Apr May Jun Jul Ago Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Ago Sep Prom. 1,928 1,894 1,858 1,879 1,860 1,839 1,833 1,804 1,812 1,753 1,702 1,713 1,626 1,706 1,694 1,678 1,666 1,676 1,680 1,690 1,713 1 PEMEX crude oil production and condensates produced in fields. Does not include partners. During 3Q19, the crude oil and condensates series was adjusted to include 6 the proportional part of Ek- Balam’s production that is assigned to the State. Thus, the series was adjusted since 1Q19
PEMEX Recorded a 1.2% Production Increase in 3Q19 Total Crude Oil Production, 2018-2019 1 Thousand barrels per day (Mbd) • Average figures for 3Q19 show the beginning of the increase in 1,893 1,859 1,816 production 1,723 1,694 1,674 1,673 Production -1.8% -1.8% -2.4% -2.4% -1.8% -5.3% -5.3% -2.3% -2.9% -2.9% -5.1% 1.2% -2.8% -0.1% • After 14 years, an increase in Variation production is achieved. In 3Q19, production increased by 1.2%, as compared to 2Q19 • The strategy of the new Business Plan is yielding 1T18 2T18 3T18 4T18 1T19 2T19 3T19 positive results and PEMEX is on the right path 1 PEMEX crude oil production and condensates produced in fields. Does not include partners. During 3Q19, the crude oil and condensates series was adjusted to include 7 the proportional part of Ek- Balam’s production that is assigned to the State. Thus, the series was adjusted since 1Q19
Authorization for Development of New Fields has been Shortened from 3 Years to Less Than 3 Months on Average 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019 Ayatsil Tsimín Xux Tlacame Xikin The Esah Tetl development of Cheek Jaatsul 20 new fields is Koban Pokche already in Uchbal Octli execution Cahua Teekit Suuk Hok Chocol Valeriana Cibix Mulach Manik Ixachi Discovery Start of development 8
Significant Cost Reductions in New Exploration and Production Service Contracts + Procurement strategy Transparency and Cost innovation honesty reductions Vertical and horizontal integration of consortiums An estimated based on the nature of the project: activities with 26% different providers were integrated Fees and cost reduction from new contracts Electro mechanics Drilling + + Platforms Pipelines + + + works EMS Logistics Crew Services MXN 24 billion of savings Infrastructure Drilling 9
New Developments will Allow to Increase Production by Year-end Thousand barrels per day (Mbd) Tetl-1001 100 Cheek-1 Tlacame-3 Total Wells 90 Manik-4 Development 11 Xikin-45 80 Hok-44 Exploration 10 70 Yaxche-100 Mulach-10 Quejekbal-1 60 Ixachi-2 50 Ixachi-24 Quesqui-1 Ixachi-20 40 Quesqui-1DL Ixachi-2001 Ixachi-1101 30 Xikin-32 Cibix-1001 20 Valeriana-1 Cibix-1 Xikin-22 10 0 Oct-19 Nov-19 Dec-19 10 Note: Estimated figures
Business Plan Operational Projections 2018-2030 Crude Oil Production (Mbd) 3,179 3,152 3,112 3,025 2,997 2,997 190 177 2,816 220 165 223 239 2,593 118 2,362 65 2,088 41 1,880 1,813 1,710 2,989 19 2,975 2,891 2,832 2,802 2,759 2,697 14 2,528 21 2,321 28 2,069 1,866 1,792 1,682 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Pemex Partners 11
Business Plan CAPEX financing 1 2020-2030 IFRS This graph shows investment according to IFRS (USD billion) 13.7 13.7 12.6 12.4 12.2 11.5 1.9 11.9 1.9 11.5 0.7 0.7 1.9 10.0 1.8 9.9 8.4 3.3 4.1 2.3 12.4 12.2 11.9 11.9 11.5 10.0 9.9 9.9 8.4 5.8 5.2 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 Own revenues Fiscal burden reduction Federal Government support CSIEES 12 1 Considers budgetary investment and private investment complement 2 Considers a reduction in the rate of the Profit-Sharing Duty to reach 58% in 2020 and 54% in 2021
PEMEX’s Main Issues 3 Fuel Theft 13
Results of the Strategy to Combat Fuel Theft Volume of fuel theft (Mbd) 1 81 74 56 Fuel theft has decreased by 93% as compared to the average for 2018 23 18 9 8 5 5 5 5 5 4 5 4 Average Nov Dec 01- Dec 21- Jan Feb Mar Apr May Jun Jul Aug Sep Nov Oct 2018 20 31 14 1 Source: Comisión Nacional de Seguridad, Informe Seguridad http://www.informeseguridad.cns.gob.mx/
The Strategy to Combat Fuel Theft has a Positive Effect in COGS Non-Operating Losses - Fuel Theft MXN billion 10.7 • In 3Q19, non-operating losses decreased by 91% as compared to 3Q18 1.0 • Positive effect recorded MXN 9.6 3Q18 3Q19 during the quarter • In Jan-Sep, accumulated 27.6 savings amount to MXN 23.8 billion 3.7 Jan-Sep 2018 Jan-Sep 2019 Note: These figures were calculated based on the price at the PEMEX pump and do not include Value Added Tax (VAT) and the Special Tax on Production and 15 Services (IEPS).
PEMEX’s Main Issues 4 Crude Oil Debt Maturity Processing Profile 16
Crude Oil Processing has been Under 40% for the Last Quarters Mbd 47% 900 50% 42% 40% 39% 41% 45% 800 39% 40% 40% 40% 40% 37% 37% 35% 35% 35% 40% 36% 700 33% 35% 30% 31% 30% 31% 600 30% 500 25% 767 400 685 670 662 657 659 654 652 646 645 20% 604 601 594 572 570 570 544 300 508 507 485 492 15% 200 10% 100 5% - 0% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Crude Oil Processing Capacity of Primary Distillation 17
With Scheduled Maintenance, Crude Oil Processing Increased by 10% Crude Oil Processing, 2018-2019 Thousand barrels per day (Mdb) 705 • Crude 657 oil processing in the 640 597 595 National Refining System 559 505 increased by 10%, as compared to 2Q19 • During 3Q19, crude oil processing recorded an increase of 62 Mbd as compared to 2Q19, and 152 Mbd , as compared to the last quarter of 2018 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 18
National Gasoline and Diesel Production is Increasing Gasoline Production Thousand barrels per day (Mbd) 235 209 202 196 189 180 161 • Higher crude oil processing has allowed gasoline and diesel production to increase 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 during the last quarters • The latter has had a positive Diesel Production impact on the company's Thousand barrels per day (Mbd) income statement. 144 143 141 120 119 114 90 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 19
Increased Gasoline and Diesel Production Reduces Imports Purchases for Resale MXN billion 160.2 • Purchases for resale 111.3 decreased by 31%, as compared to 3Q18 3Q18 3Q19 20
Business Plan Operational Projections 2018-2030 Crude oil processing at refineries (Mbd) 1,470 1,485 1,486 1,486 1,486 1,486 1,486 1,486 1,163 Dos Bocas 320 320 320 320 320 320 320 320 27 Current NRS +198 1,166 1,166 1,166 1,166 1,166 1,166 1,166 1,137 1,150 1,021 788 612 590 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Petroleum products production (Mbd) 1,493 1,497 1,497 1,497 1,497 1,497 1,497 1,490 +201 253 265 272 272 272 272 272 272 1,163 Other 1,021 169 169 169 169 169 169 169 239 197 811 155 Fuel Oil 629 610 232 445 438 438 438 438 438 438 402 133 233 164 291 119 Diesel 123 251 185 144 197 596 614 618 618 618 618 618 618 117 143 444 382 316 Gasolines 207 201 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 21
PEMEX’s Main Issues 5 High Debt Maturity Profile 22
Funding and Liability Management Strategy As part of PEMEX’s financing program authorized for 2019, and in line with the strategy to pay and refinance outstanding debt, the company announced a comprehensive funding and liability management strategy in the international debt capital markets. The objective was to manage of near-term maturities and improve its maturity profile. The strategy considered the Government capitalization of an amount equivalent to USD 5,000 million. Three major components were considered during the designing process of the strategy: New issue Repurchase of existing debt Exchange of existing debt 23
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